CBO Estimates "Obama Tax Cut" To Add $4 Trillion To Deficit Over Next Decade

Tyler Durden's picture

Two things:

First - it is no longer the "Bush (temporary) tax cut" - it is now the "Obama (permanent) tax cut", with a loophole for the 1%ers (whose big picture "impact" we showed previously)

Second - according to the just released scoring by the CBO, the total impact on the US budget deficit of said permanent tax cuts, will be a $4 trillion increase in the deficit over the next decade. In reality, due to the CBO's perpetual optimistic bias, this number will likely be orders of magnitude lower than what it actually ends up being.

Maybe the US can just increase the taxes on the uber wealthy some more, and pray that unlike Obelix, they have never heard of Belgium.

In other news, perhaps it is time for the CBO to come up with an Extended Extended Alternative Alternative Fiscal Scenario. Because the baseline Extended Alternative, as demonstrated previously and as shown below, may now be just a smidgeon optimistic.

Source: CBO

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Stonedog's picture

Probably a low ball estimate - the real number is probably twice that...

Everyman's picture

Remember that the "Doc Fix" for Medicare and Medicaid and the AMT were NOT calculated int this extimate, because it was not a "permanent" assessment.  These were up for ratification EVERY year.  NOW they can be added to the CBO istimate, but not before.  And the Doc Fix is a patch as well as the AMT patch, so neither of these are permenant.

hound dog vigilante's picture


any guesstimates per the real number(s) here?  w & w/o the patches?

Michaelwiseguy's picture

Add $40 trillion over the next century, add $400 trillion over the next millennium.

ball-and-chain's picture

Make no mistake.

We're screwed.  But what's the alternative.

If we cut spending and go with austerity, we descend into a hellish deflationary depression.

If we continue on the present course, we turn into the new Japan.

Pick your poison.


Smegley Wanxalot's picture

No worries.  There won't be any new debt because they didn't raise the debt ceiling.  Everything is under control.

Now please get back eating fritos and streaming porn like a good american.

Sudden Debt's picture

over the next decade, America will need to print everything it spends because nobody will be making any money anymore...
and for those who still work will get as much as those who don't

Marx would be proud...

sgorem's picture

really? wtf is a measely $ 4,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000. and change

philipat's picture

1. Unlike (Other) civilized countries, the US taxes its citizens wherever they live, even if taxes are SUPPOSED to be a cotribution towards the provision of services, which clearly are NOT used when living in another country.

2. Belgium's top matginal rate of income tax is 50%. So it really would not matter if America's wealthy had heard of Belgium. There are much more attractive options.

Svener's picture

Wait a minute. What happened to " tax cuts always pay for themselves"

Cdad's picture

Sweet...just tack that $4 trillion onto my son's tab.  He's good for it.


tallen's picture

If the government forecast is a 4 trillion increase, it's going to be more like 50 trillion. Going past full retard, entering hyper-retard phase.

caimen garou's picture

a flat tax of 99% for all politicians, there fixed it.

brewing's picture

especially since they just got a pay raise for all their hard work...

CH1's picture

a flat tax of 99% for all politicians

Yeah, but they'd just give themselves a 9900% raise.

How about ditching any system that allows everyone to be stolen from at once?

bnbdnb's picture

What was the score if all cuts were extended?

CPL's picture

Doesn't matter now.


This is now the end of the US dollar.

bnbdnb's picture

Why do you say that?

A Lunatic's picture

Well, with this 4 trillion, and the estimated 1 trillion (lol) for Obamacare, and our current trillion plus dollar yearly deficits there is no means of paying the bills but to print, print, print. Taking away guns will run a half trillion in the first year alone, 30,000 drones in the sky will run a few hundred billion. Gifts to Israel, Pakistan, Egypt, et al will take a few Benny Bucks too, not to mention the wars and rumors of wars over the coming decade that we are not even fighting yet. That alone should put the nail in the coffin for the dollar and freedom too come to think of it; two birds with one stone..........

CPL's picture

It's not just that though is it.  That's just the operational deficit.


Doesn't include the 200 trillion in unfunded liabilities.  Obamacare isn't covered by that trillion, not by a long shot.  That's only for paper pushing and the management system/people...government people.  The real price tag is closer to 85 trillion.  But what does it matter anymore?  Time to get out of USD, this is the move that pushes me tommorrow morning to dump every green back I have on me when the bank is open.


I don't want anything to do with it anymore.  It's not worth anything and I would perfer to get out while it's at parity with the Canadian dollar.


I don't really need to go into great length why.   Why has been posted on here and MSM for a decade.  What just happened is the US government just cut the nuts off the world reserve currency.  unlike the dramatizations on TV, people won't be running in the streets.  They'll be crying in grocery stores and gas pumps.  


Ever watch people put things back in line while at the Grocery store.  That's going to start happening with the better dressed clients as of today.  Everything you see on Bloomberg is pure myth and pretend.  The dollar value is meaningless.  If the dollar was to keep any sort of value longer, it should have fallen five years ago.  Now it is too late.


Now the only option is to print.  We'll be hearing of QE's every couple of weeks now instead of quarters.

H E D G E H O G's picture

don't forget a couple billion for green ink and paper.

HawkEye123's picture

Although I can't consent with all you staded, I must acknowledge I do really like your way of composing. tubal reversals

trillion_dollar_deficit's picture

I would assume that this figure also assumes the doc fix wont be extended after this year as the law currently says. That's about a $30 billion annual cost. Chump change sure. But remember, ending the doc fix was one of the pillars of Obamacare funding and it being scored "deficit neutral". 

johnnymustardseed's picture

It will not be passed by Boner. Why is it that nobody gets that it is the Bush tax cuts that are a big part of why the deficit is so huge? That and fucking wars!

Zer0head's picture

technically and in reality the Bush tax cuts ceased as of midnight last.

the senate has just approved the Obama tax cuts and IMO boner will with his loyal group of boner support along with his fellow dems pass the senate's Obama Tax Cuts - repeat the Obama Tax Cuts

scatterbrains's picture

Just think of all the fun the dems will have come election time with all the ball licking on bended knees the house tea party  repubs will do passing this farce.

johnnymustardseed's picture

I am right, they are refusing to go along. Not that it matters. Fucked up when nobody complains about banks getting $16 TRILLION in bailouts and we want to protect them and can't spend a few billion feeding poor people. Democracy and capitalism have failed!

A Lunatic's picture

Were we practicing Capitalism those banks would have fucking failed dude. And rightfully so.............

Too Big 2's picture

Why is it that nobody gets that it is the Bush tax cuts that are a big part of why the deficit is so huge?

Johnnyshityourpants, if you ignore the spending side of the ledger then you could have a point but the reality is that tax cuts put $$ in the hands of people who know how to produce, employ, create, vs the alternative which is for the government to take the $$. 

If our government were serious about creating jobs instead of fucking us they would institute a flat tax and cutting spending so that we have a balanced budget. 

Put this in your "Bush tax cuts is the main problem" crack pipe and smoke it! 


johnnymustardseed's picture

Too Big 2  shit for brains, supply side has never worked. Republickasses are big on cutting taxes and never have been till now about spending cuts. I am all for cutting spending. But austerity with out tax increases will never work. How about closing 700 military bases around the world. Do we need to protect the entire fucking world?

pods's picture

They aren't there to protect the world, they are there to protect the USD.


boogerbently's picture

....and WELFARE.

It is NEVER mentioned in any economic/unfunded/cost cutting discussions!

It costs MORE than Soc. Sec., Medicare or the defense.

We are promoting exponential growth of the "won't work sector".

They can make like $57K (in cash and prizes) if all freebies available are used.

A full-time, minimum wage job pays $15,080.

Also, all you Soc. Sec. haters, the biggest part of that budget is Disability.

Fully half (or more) of that is fraud. The USA has a great record of implementing well-intentioned programs.....that they don't document the need or legitimacy of the recipients.

Tell your doctor your back hurts a few times, badda bing, you're disabled.

We have programs that run on the "honor system" that cater to people without honor.


H E D G E H O G's picture

AMEN BOOGER!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Svener's picture

Man I'm with you on this one. I personally know a multiple millionaire that is collecting SSD. Every single person I know that is collecting is a fraud case.

A Lunatic's picture

Fucking sad.


Oh; Happy New Year, Bitchez............

Snakeeyes's picture

+$4 trillion in budget deficits ... just wow.

And Obama/Senate's 44:1 taxes to spending cuts ratio.


Everybodys All American's picture

CBO says there are no spending cuts. Period.

lolmao500's picture

Well of course there isn't. If spending is cut, revolt is gonna happen because the greatest bubble of all time will implode. Can't have that.

Clint Liquor's picture

As Obama said 'it's not about revenue, it's about fairness'.

CPL's picture

and unicorns that shit skittles.

DavidC's picture

A three year old could look at those CBO figures and realise what pure fantasy they are. Estimated outlays disappearing to zero by 2018. What?!


TerminalDebt's picture

It's only a matter of time now before ZH is declared a threat to national security

max2205's picture

Show's over folks. Get back to trading

Everybodys All American's picture

Will the ratings agencies score the US credit for downgrade now? If they had any balls they would come out today and say it out loud and in a clear voice. But unfortunately they will not. Nothing seems to get our spend thrift Congress's attention any longer. Now, I would presume a revolution is the only way to stop this craziness.

lolmao500's picture

A revolution means lots of death. What I would like to see is a quick military coup by a group of oathkeepers... then restauration of the constitution and public hanging of the current and past governments for their crimes.

CrockettAlmanac.com's picture

Letting someone else do the dirty work of providing social planning and security is what gets people into trouble to begin with. Our government -- people with guns who are supposed to look out for us but who look out for themselves instead as that is simple human nature -- is failing and you want to trust a different group of people with guns who were formerly associated with the first group to take over and really make sure that the little guy is taken care of this time.


Man up, face death yourself if that's what is required to take care of yourself and your family and stop depending on the kindness of strangers.